It’s good to have closure on Theranos, with Elizabeth Holmes and Sunny Balwani getting 11- and 13-year sentences respectively for fraud. While the headlines focus on the vast exaggerations that Theranos’ devices could detect cancer and hundreds of other diseases from a few drops of blood – something that anyone with a bit of knowledge about diagnostics could see was impossible – it also held back the development of a range of other devices that could have made a difference to medical diagnostics.
Back in 2014 I was working with a company, Bioscout, to develop “A cloud connected consumer device using lab on a chip technology, allow consumers to measure in a simple and consistent way, using a single drop of blood, a number of biomarkers (for example, a hormone panel of vitamins A, B, C & D, cortisol, testosterone etc). Similar to currently available devices that measure blood glucose levels.”
We were under no illusions about the number of tests that could be performed simultaneously, even using a combination of immobilised synthetic antibodies and a graphene substrate to enhance sensitivity. Maybe a dozen maximum.
Although we were working with two of the UKs leading universities to develop the device funding was impossible to raise. This wasn’t for the usual reasons, lack of market validation, technology risk, academic heavy teams etc, but simply because we couldn’t detect enough things on a single chip.
Given the state of the technology at the time, detecting a dozen different biomarkers simultaneously was pretty good, but nowhere near as good as what Theranos were offering. Almost every funder we spoke to raised the issue that as we could only detect a dozen things whereas Theranos could do 240 so we wouldn’t have a market. Trotting out academics to explain why the Theranos device couldn’t possibly work didn’t make any difference – they’ve raised billions so it must work.
I’m sure that Bioscout was not the only company whose growth was stymied or killed off by Theranos. While its eventual collapse meant that plenty of people lost money, yet more were put off investing in companies whose technologies did actually work.
A lesson learnt. If you have the right blue chip VCs on board and enough PR momentum then nothing else matters, unless the technology doesn’t work. Or following FTX maybe it’s a lesson that still hasn’t been learnt with backers conducting extensive due diligence and failing to spot the total lack of governance leading to massive damage to an entire industry.